Trading in the Zone
Master the Market with Confidence, Discipline, and a Winning Attitude
To think in probabilities, you have to create a mental framework or mindset that is consistent with the underlying probabilistic environment.
"A probabilistic mindset pertaining to trading consists of five fundamental truths"
- Anything can happen.
- You don’t need to know what is going to happen next in order to make money.
- There is a random distribution between wins and losses for any given set of variables that define an edge.
- An edge is nothing more than an indication of a higher probability of one thing happening over another.
- Every moment in the market is unique.
Creating a belief that “I am a constant winner” is a primary objective. The following sub-beliefs are the building blocks that provide the underlying structure for what it means to be a consistent winner.
I am a Winner Because:
- I objectively identify my edges.
- I predefine the risk of every trade.
- I completely accept the risk or I am willing to let go of the trade.
- I act on my edges without reservation or hesitation.
- I pay myself as the market makes money available to me.
- I continually monitor my susceptibility for making errors.
- I understand the absolute necessity of these principles of consistent success and, therefore, I never violate them.
Douglas uncovers the underlying reasons for lack of consistency and helps traders overcome the ingrained mental habits that cost them money. He takes on the myths of the market and exposes them one by one teaching traders to look beyond random outcomes, to understand the true realities of risk, and to be comfortable with the "probabilities" of market movement that governs all market speculation.
The mindset of a successful trader from the book Trading in the Zone by Mark Douglas